The Central Board of Revenue (CBR) has devised a new simplified system for the payment of sales tax refund on packing material, expediting claims involving small amount.
Sales tax collector (Faisalabad region) Shafqat Mehmud told the quarterly conference of collectors of sales tax and federal excise on Saturday, the board has given approval of the new refund system to deal with cases involving meagre amount.
Under the new procedure implemented at Faisalabad, exporters would be required to deposit invoices of tax paid, whereas other documents would not be required. However, the new system would be applicable for the processing of small amount of refund. There would be no complicated process for payment of small amount of refund on packing material. In this connection, the CBR chairman has given approval of the system for settlement of small amount of refund claims, he said.
The system has become operational at the Faisalabad sales tax collectorate. CBR chairman and revenue division secretary-general M. Abdullah Yusuf has directed sales tax collectors to liquidate all pending refund cases without any further delay, as this issue was a hurdle in the board's endeavours to further improve its performance vis-à-vis sales tax and federal excise collections.
Addressing the conference, he said despite the fact that CBR has achieved the target fixed for the first quarter of 2006-2007, but still it has not been able to fully exploit the potential exists in various sectors.
He informed the government had zero-rated five major sectors as a budgetary measure in 2005 in order to liquidate the huge backlog of refund claims as only these five sectors were generating 75-80 percent refund. But, due to various reasons and despite all assurances from collectors, the board has still not succeeded to liquidate the entire pendency of cases.
In this regard, he called upon relevant IT professionals to modernise and update the existing refund system to make it more efficient and transparent to achieve the desired result. Collectors must pay valid refund claims and reject all those which are found fake after due verification.
Stressing on enhancement of revenue collections, the CBR chairman asked collectors to closely monitor performance of different sectors in their areas of jurisdiction and ensure that tax collections were made in accordance with the potential exists in these sectors. There is a need to considerably expand tax base and substantially increase revenue collection to improve our tax-to-GDP ratio, he added.
Tax authorities expressed concern over low growth in revenue collection from non-zero-rated sectors and directed collectors to particularly focus these areas to get desired results. The CBR chairman informed the conference that voluntary separation scheme (VSS) may be offered to CBR employees.
The conference was informed that sales tax collection was Rs 75.7 billion in July-September 2006-2007 against Rs 63 billion in the corresponding period last year, showing a growth of 20 percent. Earlier, in a presentation, the conference was briefed about the latest position on regional tax offices rollout and progress made in enhancing the sales tax management system (STMS). The automation strategy was reviewed and identified priority areas in each function.
Briefing on e-filing, it was informed that the project was re-launched in Karachi with a larger group involved and improved results were expected in the current month.
In the study, need was expressed to fill gaps and meeting limitations in the automated identification of non-filers, wrong filers, short-filers and late-filers.
The centralised refund system and IMF report on VAT refund also came under discussion. The IMF report would help the CBR in analysing different VAT refund systems applicable in developed countries.
Later, collectors of the sales tax and federal excise and collectors of Large Taxpayers Units, in their separate presentations, briefed the conference about the performance of their respective collectorates/units.
The conference also reviewed implementation of decisions taken in the last conference, availability of PACCS data in STARR/REIMS and PAC matters. Progress made regarding new budgetary measures was also reviewed and satisfaction was expressed over the results achieved so far.
CBR (member) tax policy and reforms Habib Fakhruddin informed the conference about the current status of tax reforms policy and updated position of the administrative reform measures.
The issue of refurbishment of 12 RTOs and renovation of RTO at Quetta also came under discussion. The conference was informed that all the regional tax offices would become operational by June 2007. Moreover, the CARE rollout programme would be implemented by December 2007.
The member, taxpayer education and facilitation informed the conference about the updated position of the establishment of tax facilitation centres of sales tax, income tax and customs across the country.
Member (audit) CBR Abdur Razzaq, in his presentation, apprised the conference about the performance of the audit wing during the first quarter of the current financial year.
He informed the conference that the board has expedited the departmental working on the 11-year pending audit reports. The reports would now be presented before the PAC for early disposal. In this regard, 10 old annual audit reports, including 11 special studies relating to direct and indirect taxes are under verification.
The CBR has established a special 'PAC cell' in each collectorate and commissionerate with a contact person to maintain record at one place for dealing with old audit paras. Collectors would pursue all pending audit reports simultaneously, keeping close interaction with the attorney general office.
The board has also directed regional officials to focus on all outstanding reports and at the same time prioritising cases according to PAC/DAC meetings, recommendations and liquidations of proposed draft paras to avoid their printing in the final audit report.
In this connection, member, sales tax Miss Musarrat Jabeen assured collectors would fully cooperate with the CBR audit wing for early verification of audit reports.
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